Broker snap: Aveva seeing recovery in China, says Panmure

27th Jan 2012 11:16

Panmure Gordon has maintained its neutral position for Aveva, but acknowledges that the third quarter was positive and highlights an increasing momentum in China.Aveva, the Cambridge based engineering technology company, released a bullish management statement this morning, putting to rest any qualms that it might be suffering similar problems in China to its rival, Invensys. The problem Invensys had were delays to Chinese nuclear projects, where Aveva itself has interests. Aveva assured that the group is performing in line with the board's expectations, and remains confident the full year results will come in ahead of the previous year. The group has seen continued demand for Engineering and Design Systems and "good levels" of interest in the new engineering tools, the broker notes.However, analyst George O'Connor does say that the shares look expensive, trading a 24.7 times earnings. Nevertheless, "fans will be encouraged about the recovery potential in China," he said.For Panmure, it seems that the demanding valuation is too high to warrant a more positive stance. The broker retains a hold rating and 1,604p target price.Shares were trading up 1.11% at 1,638p in mid-morning trade on Friday.BC